Source: Mint
Context:
On 8 December 2025, the Securities and Exchange Board of India (SEBI) launched the Past Risk and Return Verification Agency (PaRRVA) to curb mis-selling of financial products and enhance supervision of intermediaries, including social media “finfluencers.”
About PaRRVA:
- Full Form: Past Risk and Return Verification Agency
- Purpose: To provide verified performance records of investment products and services for investors and ensure accountability of intermediaries.
- Mechanism: Uses digital audit trails and standardised reporting to validate historical returns and risks of financial products.
- Scope: SEBI-regulated intermediaries and social media-based financial advisors.
Key Features:
- Ensures credible and consistent performance reporting.
- Enables investors to access verified track records of products and services.
- Provides regulators with digital audit trails for monitoring and enforcement.
- Standardises reporting to reduce misrepresentation and exaggeration of returns.
- Allows intermediaries to present genuine historical data, strengthening transparency.
Significance:
- Investor Protection: Prevents mis-selling and misleading claims by finfluencers or unregistered entities.
- Market Integrity: Strengthens accountability of brokers, mutual funds, and other intermediaries.
- Digital Regulation: Enables SEBI to monitor online financial advice and take corrective action.
- Responsible Investing: Encourages informed investment decisions based on verified data.
Background:
- SEBI has directed brokers and mutual funds to discontinue ties with unauthorised social media advisors.
- The initiative aligns with SEBI’s broader mandate to enhance transparency, reduce fraud, and promote fair practices in financial markets.
